by
Randy Shaw
on
February 4, 2014

Everyone agrees that San Francisco should build more affordable housing. So why doesn’t this happen? The obvious answer is a lack of money. This is a city whose construction costs are so high that SPUR recently concluded that it costs $470,000 to build a single unit. San Francisco passed a $1.3 billion Housing Trust Fund in 2012, but much of this money will make up for HUD funding cuts to public housing. If significant new affordable housing is to be built, it will require passage of a November 2014 affordable housing bond.

San Francisco’s lack of affordable housing construction is almost entirely caused by a lack of money. California has not had an affordable housing bond since 2002, and despite a state budget surplus, no new housing funds are on the horizon. HUD’s budget has declined since 1981, forcing cities to choose between tearing down public housing or using local dollars.

San Francisco has not passed an affordable housing bond since 1996.

Mayor Lee reversed a long string of ballot box defeats for housing measures when he assembled a winning coalition for a long sought Housing Trust Fund in November 2012. And while it may seem too soon to go back to the voters in 2014, public support for addressing the affordability crisis has expanded.

The 66.7% challenge

The only reason for the city not to put a housing bond on the November 2014 ballot is the 66.7% necessary for passage. The Housing Trust Fund (Prop C) only got 65% support despite little opposition. A bond could be more difficult because unlike the Trust Fund it imposes a tiny increase in property taxes for homeowners and landlords (the latter can pass these costs on to tenants in certain circumstances).

So the obvious question is: if Prop C could only get 65% approval after Mayor Lee assembled the broadest coalition in the city’s housing funding history, how is 66.7% even possible?

One answer is that the bond could assist a broader income range than the Housing Trust Fund. Another is that housing is a much bigger issue today, and this could translate into greater support for a bond.

A third possibility is following a model used in San Jose of putting a general tax increase on the ballot with a separate advisory measure that the money go to affordable housing. This tax increase would only require a majority vote, but opponents will highlight that there is no requirement the new revenue be spent on housing.

A fourth option is for the city to try its best to win 66.7%, with a defeat leaving the city no worse off then had it not tried. It would also show the city left no stone unturned in trying to raise affordable housing funds.
Time for Polling

The mayor or housing industry should soon commission a poll on voter attitudes. If initial support for a housing bond exceeds 70%, the idea is worth pursuing. If support is less, the results should be publicized so San Franciscans understand why a housing bond is not moving forward.

Absent a housing bond, we will continue to see nonprofit housing groups owning vacant parcels waiting for the money to build. And nonprofits cannot acquire new sites, given their inability to construct projects on their existing land.

If a housing bond can’t win, it also makes it even more imperative for Mayor Lee to move quickly on his inclusionary housing reforms. Because without public funds, the chief source of affordable housing in San Francisco will be inclusionary units in private, for-profit developments.